Whether your business is brand new or well established, managing your sales and finances is essential for the success of your brand. Here are a few tips to help you keep on top of both.
1. Keep Cash Flowing
When it comes to the future of your business, it all comes down to cash flow. Having access to the money you bring in through sales is critical so that you can pay your bills and expenses as well as strategize for future growth. Use a merchant services processor that deposits your sales revenue into your bank account quickly so those funds are freed up for you to use within a day or two.
Also, have money in reserve in an interest-bearing savings account so that, should the unforeseen happen, you have the cash to cover it.
2. Establish an Invoicing Policy
Rather than having to constantly reach out to clients about unpaid invoices, establish an invoicing policy that makes it clear when invoices are due – and what penalties are involved for late payments.
Charging a late fee for invoices paid after, for example, 30 days net can spur even the slowest client to pay on time. You can also offer a discount for early payment as motivation.
3. Accept as Many Payment Types as Possible
The more types of payments you accept, the more customers you’ll get. Today’s point-of-sale platforms (POS) are equipped to accept not only cash and cards (both swiped and chips) but also mobile and tap payments. Making it easy for customers to pay with a variety of options means they’ll come back again and again.
4. Work with an Accountant
Setting up your accounting software, particularly if you charge sales tax, can be a headache if you’re not financially savvy. That’s where a professional accountant comes in handy: she can set up your account so that you automatically calculate sales tax for a given purchase, connect your accounting software to your POS system, and ensure that you’re doing what the IRS requires come tax time.
You can work just one time with an accountant to get your accounts set up or file your business taxes, or partner with one on an ongoing basis to send invoices and categorize expenses monthly.
5. Track Marketing Campaigns
You’re marketing your products in the hopes of selling more…but how can you know if you are unless you measure results? For each marketing campaign you launch, analyze how many site visits and sales it generated. Look at email open rates, clickthrough rates, and conversion rates to understand which types of marketing campaigns — as well as which marketing channels — net you the best results.
After looking at results, change just one thing for your next campaign, then measure again. Changing too many variables will keep you from understanding which one moved the needle in the right direction.
6. Nurture Customers After the Sale
Your work isn’t done once a customer has purchased from you; repeat customers are easier (and cheaper) to sell to and can provide a lifetime of revenue. Continue to connect with customers through email and social media. Provide them with special incentives to buy from you again.
If yours is a more hands-on sales process, reach out personally every few months to catch up with clients and understand what their needs are.
7. Take Out a Loan at the Right Time
You might assume that the right time to take out a loan is when you’re strapped for cash. However, you should apply for a loan when revenue is solid. That’s when you’re the lowest risk for a lender – when they can be assured that you will be able to repay the loan.
Track sales revenue so that you can determine when it’s the right time to apply for a loan. And do so before vendors come knocking at your door asking for payment on a late invoice. Planning ahead can help you get the best interest rate on a business loan.
8. Have a Cash Reserve Available
Having access to cash when you need it is the best way to not be backed into a corner should unforeseen expenses arise. Consider applying for a line of credit from your bank or opening a business credit card (with a competitive interest rate) so that you have access to funds when you need them. The key is paying back the money you borrow as quickly as possible to avoid interest charges.
You don’t need to be a finance wizard to manage your sales and accounts, but you do need to be diligent at doing so. Spend a few minutes each week reviewing your bank accounts and accounting software, ensuring that expenses are appropriately categorized and that you’re receiving payments from clients on time.